The Perfect Fit

New Breweries Find Their Niche in an Ever-crowding Sea of Craft Beer

It’s not exactly a closely kept secret that the U.S. craft beer industry is growing, and growing fast. Approaching the end of 2012, the Brewers Association’s running tally of U.S. breweries had already surpassed 2,200 (the highest point in more than 100 years), while the number of breweries-in-planning had blown past 1,300 and was on an exponential uptick. In fact, if the number of breweries-in-planning were to somehow maintain the pace we’ve seen in the past five years, each and every one of us would have our own little übernanobrewery-in-planning by early 2040. (No, seriously.) To understate the obvious: Things are getting more crowded.

With the influx of new craft breweries on the scene comes an even greater number of consumer choices, whether it’s the local nanobrewer opening up nearby or a new production facility packaging up specialty offerings and distributing across the country. The shape of what’s ahead (we can probably safely rule out the above übernanobrewery-in-every-garage theory) remains unknown but rather encouraging. It’s been repeatedly suggested by distributors, by craft-beer veterans—by folks with money on the table, in other words—that craft beer is likely headed for 10-15-plus percent market share, at least in due time. (It’s currently around a modest 6 percent.) What would that future beer scene look like?

Long term, it’s anyone’s guess. But perhaps one might gain at least a glimpse of what craft beer’s future holds by looking at faint trends that have already appeared on the horizon. Over the past five years or so, a vibrant group of successful, highly specialized craft breweries—dedicating themselves to Belgian-style ales, or German-style lagers, or “farm-to-bottle beer,” or barrel aging, or Brettanomyces—suggests that future growth, in part, may very well be found within craft beer’s underexplored niches.

King Brett

While it really only gets easier for beer consumers to benefit from the industry’s growth, the flip side is that these up-and-coming breweries face increasing competition: for shelf space at retailers, for tap space at bars, for distribution and even for brewing equipment. Brewers are frequently indicating lengthy lead times for new equipment orders or (just as often) a lack of readily available used equipment. Supply and demand fluctuates, of course, as manufacturers and secondhand markets attempt to adjust to how fast the industry is changing.

Another major constraint is ingredients, says Paul Gatza, director of the Brewers Association: “If you were trying to start up now and you don’t have a contract for your hops and you’re thinking you’re going to make this killer Cascade IPA, you may not be able to get Cascade for a year until you’re able to contract for the next growing season.” Whether hops or fermentation tanks, supplies are still limited.

One way to avoid some of these constraints is to take paths less-traveled, assuming a different artist tack. Gabe Fletcher, who established a loyal following during his 13-year stint at Midnight Sun Brewing in Anchorage, AK, launched his own brewery, Anchorage Brewing Co., in June 2011 with the telling motto of “Where brewing is an art & Brettanomyces is king.” Anchorage Brewing focuses almost completely on beers fermented with Brettanomyces.

Fletcher’s new operation is currently situated in a concrete warehouse directly underneath the Sleeping Lady Brewing Co. The warehouse contains wooden foeders for aging some of his beers, and his brewing arrangement involves renting Sleeping Lady’s equipment to produce wort before pumping the unfermented liquid into his rented warehouse for multistage fermentation.

By focusing on a yeast-driven approach, Fletcher manages to circumvent some of the ingredient constraints felt by many of the more traditional brewers. Yeasts are comparatively easy to obtain and propagate. Anchorage kegs very little, overhead’s kept to a minimum, and Fletcher’s lineup—including offerings such as Whiteout Wit Bier (triple-fermented and aged in French Chardonnay barrels), Bitter Monk (a Belgian-style double IPA, also with Brett) and Galaxy White IPA (bottled with Brett)—is positioned upon far less-frequented territory.

Speaking of Sleeping Lady’s brewing approach, Fletcher comments, “They would be more of a general [approach]. You know, your IPA, your stout, your pale ale, amber, golden: kind of the core beers a lot of microbreweries go with. But they’ll also do some other really interesting stuff, too: some other Belgians, imperial stouts, barley wines. … But nothing with Brett, no sour beers, and that’s kind of why the owner was OK with me starting downstairs, because [Anchorage Brewing] didn’t compete with their business at all.”

The Galaxy White IPA is what Fletcher has typically made the most of, as its time in production (about three months) is short relative to some of the other Anchorage beers, which can take up to a year and a half from start to finish. That first release of Galaxy, procured early on, showed juicy tropical-fruit hop character and a modest Brett contribution of citrus, along with a mild peppery firmness from peppercorn additions and witbier yeast.

It will gradually show a lessened hop presence with time in the bottle, while the Brettanomyces will continue to develop and take over: a temporal transition Fletcher is artistically drawn to. “It just turns into a completely different beer. I like the journey.”

In his previous position at Midnight Sun, Fletcher had been experimenting with sour beer cultures before 2007, but it wasn’t until then that things started to click. “In ’07, I made a beer called Pride [a Belgian-style strong pale ale]. And that beer sort of changed everything for me as far as working with Brett and figuring out how to make beers taste good through that whole process. I was really, really happy with that beer, and then after that I just kept on adding [Brett] beers to the list that we did until I left. … I guess I sort of saw the niche in the market, and I saw how it was growing. And there were some people doing it, but they weren’t doing it on a big-enough scale to fill much of the market.

“There was never a market before this, you know? Like, 10 years ago, you could sell a little bit of this kind of stuff, but nowhere near what it is now. And people, man, their palates are just so different now.”

Things have been progressing well for Fletcher, both in terms of a planned expansion and consumer response. In January 2012, the beer-reviewing website RateBeer.com (which, in full disclosure, I work for) named Anchorage Brewing Co. the top new brewer in the world for 2011, as ranked by the site’s users.

Better Bitters

It’s important to emphasize that brewers have effectively been filling niches for centuries, and, from our vantage point in the U.S., perhaps the vast majority of foreign breweries might feel like niche breweries if they were suddenly relocated to American soil. (The inverse might be rather less true, as this country’s craft beer scene has, for a multitude of reasons, generally tended to dabble in and sample from the older, established beer cultures abroad.) But it’s less a question of clear-cut categorization than it is something far more pragmatic: In competitive and well-developed craft beer scenes, how does a talented brewer manage to open up a new brewery without getting lost in the crowd?

Having recently researched and published a beer guide to Northern California, I can at least confidently speak to how things are taking shape in this section of the country. This region is home to breweries like Anchor, Sierra Nevada, Russian River, Bear Republic, Lost Coast, North Coast, Lagunitas, Marin, Moylan’s and so forth. One doesn’t simply walk into NorCal with a mediocre IPA. So many of the new breweries and breweries-in-planning here are doing one of three things: (1) opening up small-scale brewpubs or tasting rooms in cities that don’t yet have a local, (2) going the low-overhead contract or alternating proprietorship route (see sidebar), and/or (3) launching with a focused, underrepresented niche lineup.

One of these new local niche breweries is Dying Vines in Oakland, which opened in November 2010 and produces its English-minded lineup of session beers out of Linden Street Brewery, with which it maintains a close relationship. Kel Alcala, managing partner at Dying Vines Brewing, was also recently named head brewer at Linden Street, such that Alcala now oversees both breweries’ production.

“Whereas people refer to us as gypsy brewers and have that kind of moniker,” Alcala says, “for us it has always been that single drive to keep everything as tightly in-house as possible, and working with Linden Street [and founder Adam Lamoreaux] in particular, knowing that we’re going to make each batch as consistent as possible.” (Linden Street, in a similar vein, focuses entirely on brewing “Old California Lagers,” as they’ve termed them: effectively, pre-Prohibition steam beer.) In many ways, these brewing approaches can be seen as a throwback to equipment-driven realities. “Traditionally, English breweries are single-infusion, you know,” Alcala says. “You mix your grain and your water, you let it sit, you run it off, you collect it.” Similarly, a German brewery was traditionally set up to handle the step and decoction mashes specific to brewing those styles. Belgium: similar deal.

“There’s a lot of breweries over in Belgium that are cast-iron mash tuns, I mean old-school equipment that definitely imparts a different type of flavor, much more rustic-type flavor, and to have a linear production facility [like some of the U.S.-based brewers that occasionally dabble in Belgian styles] that’s all geared toward just whipping beer, and then try and do an artisanal style, … it kind of does a disservice.” While these limitations aren’t often appreciated or always noticed on the consumer level, a brewer’s system and equipment often strongly influence the beer styles that brewer can do well.

Skeptical? The devil’s habitually in the details, but consider the following: For the last two years, the Great American Beer Festival Small Brewing Company of the Year Award has gone to exactly these types of breweries: Chuckanut Brewery in 2011 (which opened in 2008 brewing German styles) and Funkwerks in 2012 (which opened in late 2010, with a focus on Belgian saisons). At Dying Vines, Alcala is brewing up beers like Old Brick Bitter and Dee’z English Mild that are atypically precise for American attempts at English-style ales. “When I have a person who grew up in England … come over here and tell me that this is the first proper pint of bitter they’ve had since they left home,” Alcala reflects, “it’s a good feeling.”

House of Barrels

Another Bay Area brewery (one that hasn’t even officially opened yet, as of this writing) will also rely on the excess brewing capacity of its neighbors. But it won’t be an alternating proprietorship. Nor can it really be considered a contract brewery. The Rare Barrel, opening up on the western side of Berkeley later this year, will be something else entirely.

Jay Goodwin, The Rare Barrel’s director of blending and brewing, previously served as head of barrel aging at The Bruery before venturing out on his own. With partners Alex Wallash and Brad Goodwin, he’ll be spearheading this ambitious approach to a barrel-aging-focused “beer company,” which will be more along the lines of Belgian lambic blenders than anything resembling a conventional American brewhouse. Two hundred and five red wine barrels from Central California already fill their warehouse, and they’re currently working out the final details with the local breweries they’ll be partnering with to provide them with unfermented wort.

The general concept: Create wort at local breweries with room to spare, truck it back to their warehouse in stainless-steel tanks (via a 16-foot box truck, as often used in wineries), and then handle the fermentation, conditioning, sampling, blending and packaging of a wide range of sour beers onsite. They hope to release their first beers by late 2013, predominantly packaged in 750 ml bottles and initially self-distributed throughout the Bay Area.

Their approach not only affords them the ability to avoid various upfront equipment costs (pattern alert!), but it also gives them the freedom to focus on a less-charted element of brewing that most other breweries tend to do as a side project. “If we focus all of our efforts on sour beer,” Wallash says, “we feel like we will have a better understanding of how to make it and overall, in the long run, make a better product than if we were to spread our production efforts out across a number of different things.”

The aphorism “constraints breed creativity” was something Goodwin mentions as a sort of premise underlying all of this, and that tends to ring true not only within the context of The Rare Barrel, but also for many of these other niche breweries as well. The saying “Jack of all trades, master of none” didn’t happen to come up—but it certainly could have.

Conceptual Art

One further way in which these new, niche-minded craft breweries are coming into focus is showcased by San Francisco’s Almanac Beer Co., which adds a more concept-minded approach to the above group. Jesse Friedman and Damian Fagan launched Almanac in 2010, with their “farm-to-bottle beer” embodying the motto “Beer is Agriculture.” In many ways, Almanac is taking the locally minded ideals of craft beer closer to their logical conclusion.

“The real core idea,” Friedman explains, “is that beer is traditionally made with dried ingredients that can easily be transported and stored. And the result is that it really divorces beer from a sense of place and a sense of, to pull from wine vocabulary, a sense of terroir. By collaborating with local farms, local agriculture systems, we really try and create beers with a culinary point of view, … a real sense of place and the idea that these beers are tied to the Northern California agricultures, and if you made these beers somewhere else with different ingredients, they would not be the same.”

Producing its beers at Hermitage Brewing in San Jose (there’s a trend here, and especially so in the Bay Area), Almanac recently launched two year-round “California table beers”: a honey saison brewed with local honey from Marshall Farms and an extra pale ale incorporating mandarin oranges from Blossom Bluff Orchards in the San Joaquin Valley. They also showcase California-grown barley and hops throughout.

It’s an approach that’s been particularly well-matched to the culinary mindset around the Bay Area, allowing Almanac to place its bottled products in higher-end restaurants that often use the same purveyors that supply these beers’ special ingredients. While occasionally exemplified in similar approaches, like Fullsteam’s “plow-to-pint” mindset in North Carolina, it’s an uncommon brewing philosophy that pairs nicely with craft beer’s recently culinary push.

Friedman put the idea of niche brewing into an effective parallel with concepts well beyond craft beer. “Nintendo’s CEO, when they created the Wii,” he recalls, “talked about what they called their ‘blue ocean’ strategy. What that referred to is that there are two types of ocean: There’s red ocean and blue ocean. Red ocean is red because it’s [filled] with sharks fighting over the same area. And blue ocean is blue because there’s no one there.”

It will be interesting to see how many more new breweries favor this safer approach, particularly as the craft beer industry continues to grow more congested. I’ll be lounging out in the blue waters, should anyone need anything. Because to understand these niche brewers, and the ones that will soon follow, is to know why our beer options have never been better.

Ken WeaverKen Weaver is a professional beer writer and editor based in Petaluma, CA. His first book is The Northern California Craft Beer Guide.